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The Rise of eSports

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On the evening of August 8, 2015, a 16-year-old Pakistani kid named Sumail Hassan laid down his headphones and stepped away from his computer where he’d been playing a video game called Dota 2. Fireworks exploded around him. He hugged the friends he’d been playing with. They had just won $6.6 million.

With a neck pillow perched around the back of his head, gum in his mouth, and a dazed look on his face, he descended the steps from a glass booth in the center of Seattle’s KeyArena. Four and a half million people watched on screens around the world as he shook hands with his defeated opponents, before walking to the middle of the podium and raising the trophy above his head.

“What does this mean to you?” the host of the tournament, Kaci Aitchison asked him, thrusting a microphone into his face.

“It just means everything for me. We got it now. I’m feeling pretty excited,” he babbled, a little incoherently.

You can hardly blame him. Hassan’s family of eight had moved from Karachi to Illinois just three years beforehand. Crammed into a three-bedroom apartment, with money tight, they found the move a struggle. But in his first month in the United States, Hassan had already earned $200,000 in prize money.

He’d been playing Dota 2 since the age of 7, encouraged by his brother Yawar, who also plays professionally. In the world of Dota, teams of five characters fight to be the first to knock over a building in the enemy’s base called an ‘Ancient’, but that doesn’t explain the half of it.

In just one battle, a bleeping globe of light could teleport a demonic horseman into the fray while a sea monster causes tentacles to erupt from the ground — all while a relentlessly-grinning disco thespian zaps his enemies with lightning-infused clones of himself. It’s ridiculous, fast and furious, and simultaneously rewards both deep strategic thought and supersonic reflexes.

An online tournament is held every other week or so, where fans can watch matches through services like YouTube and Twitch, accompanied by professional commentators who explain the intricacies of different strategies. Every month or two, a larger tournament is held in a stadium where teams are flown in to from around the globe and players can enjoy the atmosphere in person, with huge screens depicting what’s going on in the game.

In less than a month, Sumail and his team Evil Geniuses will return to defend their title, but it won’t be easy. Since their win in Seattle, the team has been rocked by internal strife and the departure of several key players. They crashed out in 13th place at a tournament in Manila just a month ago, but just like in any sport, losses show the real strength of a team. Soon, we’ll find out whether Sumail and his teammates have the grit and determination to pull it back, or whether it’s time for a new squad to step into the limelight.

 People have been playing video games competitively for many decades. The earliest known competition dates all the way back to Spacewar, one of the first ever video games, where players take on the role of one of two ships and engage in a dogfight around the gravity well of a star. An “Intergalactic Spacewar Olympics” took place at Stanford University on October 19, 1972. First prize, which went to team champions Slim Tovar and Robert E. Maas, and free-for-all winner Bruce Baumgart, was a year’s subscription to Rolling Stone.

In 1980, Atari organized a Space Invaders championship that attracted more than 10,000 participants, and, around the same time, an American businessman named Walter Day founded an organization called Twin Galaxies to keep track of high scores in arcade games. By 1982, video game tournaments were already being televised on the show Starcade, and particularly skilled players were featured in the pages of magazines like Life and Time.

Netrek — a 16-player, real-time strategy game that could be played across the web—debuted in 1988. Players had to destroy their opponents’ spaceships and take over enemy planets. Wired described it as “the first online sports game.” A year later in 1994, players competed at the World Game Championships in digital analogs of real-world sports, like NBA Jam and Virtual Racing.

But it wasn’t until the second half of the 1990s that e-sports really became a phenomenon in its own right. Titles like Quake, Unreal Tournament, Counter-Strike, and Warcraft grew hugely in popularity thanks to their multiplayer focus, and skilled players like Stevie “KillCreek” Case, Johnathan “Fatal1ty” Wendel, and Tomo Ohira began to earn serious money for winning competitions. Sponsors began offering players money to wear their logos or use their equipment while playing.

Around the same time all this was going on in the West, the 1997 Asian financial crisis was in full swing. Many governments responded by beginning large infrastructure projects, including the rollout of new broadband technology capable of far faster connection speeds than the modems that had been common previously. At the same time, high unemployment rates meant there were large numbers of people looking for something to do while out of work.

The result was massive growth in the pastime of playing games at internet cafes. Players competed over different games, with a real-time strategy title called Starcraft proving particularly popular. Soon, East Asia (and particularly South Korea) had a huge e-sports scene of its own with matches regularly broadcast on television. In 2000, the Korean E-sports Association was founded as a wing of the Ministry of Culture, Sports, and Tourism.

Elsewhere, however, mainstream acceptance of video games as a sport didn’t come nearly as fast as acceptance of them as a cultural force. In the West, mass-market adoption of games consoles like the Playstation and Xbox reduced the influence of e-sports, which are mostly PC-based. In the mid-2000s there were several sporadic attempts to broadcast matches on television in Europe and the United States, but most proved short-lived.

The rise of streaming video, however, changed everything. With the launch of services like YouTube and (gaming-specific streaming site) Twitch.tv, it suddenly became easy to follow a tournament being played on the other side of the world. It also allowed notable players to broadcast their games live, giving them another opportunity to sell sponsorship and make a living. Commentators, or “casters” as they’re known within e-sports, began to attract followings of their own.

Since then, the growth of e-sports has been extraordinary. Streaming video has allowed the scene to get so huge that mainstream acceptance is no longer a consideration, let alone a priority, for most players and fans. They don’t care if it’s on television or not, because watching a game on Twitch is a superior experience anyway — you can watch at a time that suits you, pause in the middle of the action, discuss the game in an accompanying chat room and more. Without Twitch, which Amazon bought in 2014 for close to $1bn, e-sports would be a shadow of its present-day strength.

What’s particularly interesting about e-sports is how it’s distributed around the world. Some nations excel in digital battle, while their neighboring countries totally fail to do so. To get a grip on how, I grabbed data from E-Sports Earnings — a community-driven website which tracks publicly-available data on prize winnings across different games. While it doesn’t include, for example, a player’s sponsorship income, it gives a good idea of how prizes are distributed and therefore the level of success that different players have enjoyed.

Here are a couple of charts based on the world’s top 500 e-sports earners, aggregated by country. When you look at the number of players each country has in the top 500, South Korea, the US and China dominate. That’s not too surprising, with their large populations. So I divided my database by population and found something rather interesting — the Nordic nations dominate instead. South Korea still ranks highly (thanks to its early investment in broadband) but northern European nations score significantly better. In Sweden, if you took a million people at random from the population, almost five of them would be professional e-sports players.

 So let’s say you were a young, skilled player (perhaps living in a Nordic country) and you wanted to “go pro” to earn piles of cash. Statistically speaking, you’d want to play Dota 2 — E-sports Earnings’ data shows that it has by far the highest median lifetime earnings than any other game — more than $350,000.

Dota 2 tournaments simply pay better, and the reason for that is because amateur players contribute to its largest prize pools. Dota is totally free to play, though you can pay to customize the appearance of your characters, and a few other cosmetic tweaks. A few times a year, its publisher Valve Software also sells a ‘Battle Pass’ that includes a bundle of customization options, and 25 percent of the cost of each pass goes into the prize pool. In August 2015, Valve offered up a prize pool of $1.6 million for the tournament won by Evil Geniuses, but that swelled to $18.4 million once Battle Pass purchases were added.

Looking down the list of high-earning games is interesting, because it’s like looking back through history. Some of the titles are rising in popularity, some are falling, some are distinctly dead. But they’ve all had a major part to play in the sweeping narrative of e-sports over the years, with hundreds of players having given up substantial portions of their life to them. Some with success, some with failure, but all with profound love for their sport.

 Let’s talk about success and failure. When you look at a histogram of lifetime earnings among the top 500 e-sports players, you can see that becoming a millionaire is not likely to happen for the overwhelming majority of players. According to the data from E-sports Earnings, most top players make less than 400,000 in prize money over their lifetime.

That lifetime of earnings is about as short as that of a traditional athlete. One of Sumail’s teammates in Evil Geniuses, Clinton ‘Fear’ Loomis, is known jokingly as the “old man of Dota”. He’s 28. Once past their mid-20s, most players either take up coaching or analyst roles, move into the business end of the industry, or retire from the scene entirely.

 So while a young, skilled gamer who wants to drop out of university and go pro can now point their parents to multiple other stories of players who did the same and are now wealthy beyond belief, there are, of course, far more examples where it hasn’t worked out like that. Competition is more fierce than it has ever been and it today takes substantial personal investment and sacrifice to become a well-known player.

Unfortunately, that means cheating scandals in e-sports are about as common as they are in real sports. Even though most major competitions now have officials monitoring for unauthorized hardware or software running on a computer, many high-tier players have been banned and even fined over the years for cheating or fixing matches for profit.

That’s not the only problematic issue that e-sports has in common with “regular” sports. Doping has become a recent topic of debate, with many players using stimulants to boost concentration and reaction times, or sedatives to remain calm under pressure. One e-sports executive recently admitted that it’s common for some players to take as many as three different drugs before a competition.

It’s also hard to avoid noticing that the e-sports scene is almost entirely male. Gendered harassment, sexism, and homophobia are commonly seen as part of the culture, even by some pro players. The few female pros that have found success are often characterized as having done so “in spite of” their gender, and there are only a handful of openly gay players. Not enough high-profile figures are willing to challenge the status quo in this regard, in fear of the backlash they might receive from fans, and as a result it’s hard to see this changing in the future. Being an e-sports fan too often involves turning a blind eye to unpleasant behavior.

I got into e-sports a little over four years ago. Some friends and I were in a pub discussing a game called Dota 2 that we’d all heard about but no one had actually played. We resolved to give it a try (one of my friends chronicled the hilarious results here), and it somehow stuck with me for much longer than most other games. I discovered that beyond the steep learning curve lay a complex tapestry of game mechanics, obscure knowledge, and lightning-fast reflexes. It was a game I could learn but never master. I loved it, and within a year I was watching pro gamers play on Twitch and YouTube.

To date, I’ve played more than 880 hours of Dota 2, but I must have spent far, far longer than that watching other people play it online. Once or twice a week I’ll spend a lunchtime watching one of my favorite teams (go Alliance!) play a match. Often I’ll have it on in the background, muted on the TV, while I work. When a big tournament is on and Alliance is playing, I’ll sometimes decline social invitations because I want to watch them live. I don’t tell people that, of course. It’s seen as somehow weird to stay home and watch people playing a video game—despite it being totally fine to stay home and watch football.

I’ve branched out occasionally to try and watch other e-sports. I went to the WCS 2012 Starcraft II finals in Stockholm and enjoyed it tremendously, but it never hooked me enough to keep me following the scene. I’ve watched a little bit of Counter Strike: Global Offensive and Rocket League when it’s been on, more out of curiosity than anything else, and they were entertaining, but it’s tricky to find the time to follow more than one game with any real commitment, and Dota is the one I know well. I’ve invested time in learning it, and I’m enjoying the rewards of that investment.

So in closing, I should probably recommend a few e-sports to get into for those of you who are curious enough to read got this far down the article. One common issue with spectating many e-sports is that it’s hard to get a good feeling of what’s going on unless you’ve played a little yourself. So if in doubt, go with what looks like it would be most fun to play.

Otherwise, if you have lots of time, Dota 2 is probably the biggest e-sport in the world right now. It’s deeper and more complex than its rivals, and requires a lot of investment from the viewer, but the rewards are huge. If you want to get a taste of how good it gets, watch the fifth match in the best-of-five grand final between Alliance and Na’vi in 2013. There’s a reason any game between those two teams is referred to as Dota’s very own El Clásico.

If you prefer something more traditionally game-like, look into Hearthstone — a digital card game published by Blizzard Entertainment. It’s growing fast, and matches tend to last only a few minutes, making it easier to fit into your day. You can also play it on tablet computers, for when you’re bored at work. Start out by watching this ThijsNL play Savjz at KFC Spring in 2015, with the former battling for his life in a nail-biter of a match.

Finally, if you prefer less of a time investment and want something you can understand immediately, try Rocket League. It’s football with cars in microgravity, and doesn’t get a lot more complicated than that. In 2015, Cosmic Aftershock played Kings of Urban in the grand finals of MLG. The prize pool was just $500, but it didn’t stop both teams playing out of their minds. You’ll be on the edge of your seat.

Now, over to you. I’m sure you have your own ideas about what e-sports people should get into (especially if you play League of Legends and are annoyed that I spent most of this article banging on about Dota)

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About the Author

This article was written by Duncan Geere, Gothenburg-based freelance science, technology and culture journalist. Editor at http://www.howwegettonext.com

Entrepreneurship

Why Angel Investors are Shaking Up the Global Startup Scene

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Candace Johnson is someone who has made a global impact on our modern international telecom and broadcast business. She co-initiated the foundation of SES-Astra and SES Global, which today owns a fleet of 54 satellites and broadcasts 6500 TV channels. And she founded the world’s first Internet-based online service, Europe Online, making it into one of the first broadband Internet services.

But it was in her role as president of EBAN, the European trade association of several hundred business angels, which brought her to Eindhoven’s High Tech Campus recently. She explains why angel investors are making a difference to the global start-up scene and explodes several myths that surrounds the way they do business. She spoke with StartupDelta’s Jonathan Marks.

Building the match between angel investors and hardware startups

“People often think that angel investors are people who do investments around the corner, locally, or in services like e-commerce. To be frank, when the HTCE management told me that they were focussing on the hardware side of things, I was thrilled.”

“What I’m trying to do as President of EBAN, and having incubated MBAN (MENA Business Angels Network) and ABAN (African Business Angels Network) under my presidency, is to extend the scope of angel investments. The vast majority of angels are already tech savvy. But we need to educate our successful angel investors to invest more in hardware and infrastructure. We also need to help start-ups develop a pitch that speaks to the interests of angels, so they can get funding for their initiative.”

“We run the EBAN Training Institute with the goal of raising standards. We’re seeing more and more that the best angel investors are serial entrepreneurs. They bring their trusted network, expertise and experience to the table.”

“Money is important too, but it is not at the top of the list. Business angel investors are high net worth individuals who usually provide smaller amounts of finance (€25,000 to €500,000) at an earlier stage than many venture capital funds are able to invest. They are increasingly investing alongside seed venture capital funds.”

Angels are more important than most people know

“We follow the guidelines and standards developed by the European Venture Capital Association. For over seven years, during the depths of the financial crisis in 2008 until the recent recovery started, it was the angel investors who took over the role of early stage financing. More than €7.5 billion are being invested annually in Europe, with a sustained growth in recent years. Of that €5.5 billion comes from angels. In fact we have had to professionalize our profession to meet the demand of the growth in this early stage ecosystem.”

We always have an exit strategy

“Angel investors can only continue to invest if they have exits. I hear many people talk about investing. Only a few discuss exits. I want to change that. I also stress that proven entrepreneurial success is essential in order to become a member of our association. We need to ensure that useful “lessons learned” are shared with the start-ups. They are always based on hands-on real-world experience. We have no time for people who are using new blood to try and correct mistakes they made in their own failed companies.”

“EBAN was started in 1999 together with the European commission. For the first ten years, I think people were too focussed on the investing part. Now we need to focus on exits and returns on investment. Without returns, business angels are out of business. And remember there is only a short window of opportunity during which start-ups can scale-up to becoming global success stories”.

“Our feeling is that you should not make an investment in a company unless you can see the path for the exit. The exit may be a trade sale, an IPO, etc. The exit also does not have to be 100 %. It does, however, have to bring you a return on your investment so that you can continue to invest. This approach helps you focus on building great companies. There’s always competition in healthy markets, so no-one can afford to waste time. We’re not a charity; we’re doing this because we love building and financing global success stories. We’re therefore looking for companies with a real marketable product, not a prototype or a collection of well-presented ideas.”

Is there specific advice you can share with high-tech startups?

“In the last few years we’ve seen the rise of the accelerators alongside incubators. They have helped raise standards because a good idea needs to be validated by the market before it is the basis for a high-growth company.”

“As investors, we always need to see a start-up demonstrate that they have first clients and initial revenues. We’re not saying that they have had to scale or show market traction. But if we are going to put in our personal money, then we expect the founder to be resourceful enough to work out the first product, to have found the first clients and show us evidence of the first revenues.”

“The incubators who help get an idea into reality and the accelerators have been good at making startups better prepared for angel investment, offering the right coaching to turn an idea into a validated business. That means angel investors are better able to select the growth companies and focus on making a good return on their investment.”

Hanneke Stegweg

“We recognise that young companies need to present their business proposition to the angels attending our annual conference. So we’ve created ways that teams get immediate, honest feedback on the quality of their business presentation. We have one full day of preparation and coaching followed by a Global Investment Forum. The best go on to pitch to the entire network. This year, the “company to watch” category was won by Hanneke Stegweg, who is the Dutch CEO of the iLost company. Together with Neelie Kroes, I am keen to see more women founders lead entrepreneurial teams.”

What needs to change for things to move faster?

“We held this year’s EBAN congress in Eindhoven at the recommendation of several members. They all work in the innovation and financing of innovation field. But this region also came up in our discussions with StartupDelta. We have worked closely with Neelie Kroes when she was with the European Commission.”

“We were tipped off to the High Tech Campus specifically by our Russian members: the Russian Business Angels and the Skolkovo Foundation who are building the Skolkovo science park just outside Moscow.”

“And last, but not least, I know Eindhoven from my work in telecommunications and broadcasting hardware field. We often came here to work with Philips on the establishment of the DVD and MPEG-4 standards.”

“During our visit to the Brainport area it was clear that there is more than enough money in the region and a healthy appetite to invest in innovation. But there are some caveats that we feel need to be addressed.”

“Frankly, I think we are rather tired of the “nice-to-have” e-commerce companies. We would prefer to reinvest in world-class companies who are building something tangible, solving a real-world challenge. They need to demonstrate they can scale and become global.”

“We can see that the efforts by many have helped to raise the bar in the Netherlands and that’s good news for everyone. But remember there is a difference between entrepreneurs and SME’s. Entrepreneurs are the only ones to change our world. They create large companies, worthwhile employment, and that grows into large revenues.”

Failure is not an option

“We should get rid of this talk of failure being an option. If you’re taking angel money, it is NOT OK to fail.”

“If you take third party money, you have a responsibility as an entrepreneur to do everything you can to make a return on the investment of your business angel. The media keeps talking about friends, family and fools. But that’s nonsense! Founders, families and friends build great companies!”

“I have always been a free marketer at heart. Europe and The Netherlands need to create nations of investors. I believe in the power of private sector-led investment. Government needs to follow the leads set by business angels, not the other way round. We are investing our own money and using our years of experience to scale up these companies. An entrepreneur who is not willing to work and dedicate her or his lives 24/7 to achieve the goal should look elsewhere for money!”

“We’re fortunate that the EBAN network acts as a magnet for excellence. We were honoured to have the President of the European Research Council and the Head of Technology Transfer of the European Space Agency address our Congress to show us where the technology trends are going and where we should invest.”

“From a venture and entrepreneurial financing perspective, we were most grateful to our colleagues from the United States who joined with our European, MENA, and African colleagues to set the bar high in creating, building and financing global success stories. Amongst those joining us in Eindhoven from the United States were the president of the Global Accelerator Network from the USA, the president emeritus of the Angel Capital Association of the USA, the President of Start-Up Angels and Board Member of Up Global from the USA. We also welcomed the President Emeritus of the Crowd funding association of the US as well as the chairman of New York Angels. And we were delighted with the presence of David S. Rose, the president of GUST.com. These are some of the world’s best experts in angel investing.”

“They all said they were pleasantly surprised by the high standard of the startups that came to Eindhoven from all over the world. It was well above what they had expected. Start-ups from Africa, Middle East and Europe traditionally explain what they do, rather than explaining to investors why their idea is important. But that’s changing rapidly for the better. Entrepreneurs are also getting better at defining what they need in order to scale-up.”

NEXT STEPS : It’s all about active networking

“I should explain that in expanding our reach in Europe, with have formed alliances with the European Space Agency and the European Research Council. They also have their own accelerators and incubators. I think the onus is on the angel investor community to help bring this scientific community to a higher level of entrepreneurship. They need to think about the market for their inventions from the beginning. I believe we can help these organisations filter out the very best ideas and give those the attention they need to scale ideas into real businesses. There needs to be a validated market need for the technology they are developing.”

“We have two main events. There is the annual EBAN congress, this year in Eindhoven and next year in Porto, Portugal. And we run the EBAN Winter University, this year running from November 17–19th in Copenhagen. We’re doing this with leading organisations active in Europe’s creative industries. And all this is in addition to individual events and competitions organised by EBAN members at a local, regional and national level.

Increasingly we’re assembling cross-border syndicates, both between European countries and increasingly inter-continental networks linking Europe with innovation hubs in Africa, Middle East and North America. As companies scale and go global, it is important they have access to an international shareholder network. It’s a softer landing when they cross continents.

We also believe there is a way in which we can build partnerships with techno-business parks around the globe, led by the flywheel initiatives shown by High Tech Campus Eindhoven over these very fruitful days in the Netherlands.

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About the Author

This article was written by Jonathan Marks, Executive Director at Photon Delta. See more.

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Entrepreneurship

Myths & Facts about Entrepreneurship

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Today, there is a pervasive and nearly deafening mantra insisting that you quit your job and become an entrepreneur. The collective says you should do it today because every day you wait brings you closer to a life of poverty and regret.

A central theme in the entrepreneurial world is challenging the status quo and questioning conventional wisdom in search of new and better ways of doing things. If you’re just going to follow the pack, you may as well just get a real job and call it a day.

Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these.

Let’s take a glance at some of the Myths of entrepreneurship:

1. You’ll be Happier

Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these.

2. You’ll have more freedom, control and work-life balance

If you’re on your own, chances are you’re going to find yourself wearing all sorts of hats and working 24×7 for a very long time. Work will become your life. There’s nothing wrong with that, but not everyone feels more freedom and control that way.

3.You’ll be more fulfilled

Do we know what just about everyone loves to do? Great work that accomplishes goals they can be proud of. One can do that working for a big company, a small company, or their own company. Fulfillment has nothing to do with business ownership. If one wants to manage, lead, or run a business, it’s better off learning the ropes in a good company before starting your own.

4.There are no jobs; technology and outsourcing killed them all

It is shockingly untrue. If technology destroyed jobs, then which one will you call the most lucrative and fastest-growing industry on the face of the earth.That’s right: technology. If you can’t find a job, chances are you lack in-demand skills or education, in which case, yes, you might want to consider starting a small business which does not require much of exclusive skill sets in particular.

5.Entrepreneurs Live a Glamorous Lifestyle

That’s again untrue. Most entrepreneurs do not live a glamorous lifestyle; if they do, their investors should cringe. Entrepreneurs are notoriously frugal, hard working and opportunity-obsessed with little time for outside activities. These qualities are not hallmarks of the glamorous life.

Now,Let’s look at some of the facts of entrepreneurship.

  1. Most successful entrepreneurs succeed by exceptional execution of ordinary ideas: See Jiffy Lube, Starbucks and Charles Schwab.
  2. Most successful entrepreneurs concentrate on minimizing risk rather than taking huge risk at the time of starting their companies.
  3. Successful entrepreneurs use their innovative passion in many ways, such as buying companies, creating new ventures within larger companies and re-strategising nonprofits.
  4. More than 80 percent of new ventures are boot-strapped from personal savings, credit cards, second mortgages and the like. The median start-up capital is about $10,000. Waste Management began with a single truck; Sam Walton started with $5,000. So, in short access capital is not required to startup.
  5. Being first to execute well and delight customers is not at all important for success. A lot of startups have entered quite late in a particular startup industry and have done well.

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About the Author

This article was written by Utkarsh Sharma.

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